04 May HOW MANY UNITS WILL IT IMPORT AND WHAT WILL BE THE DOMESTIC PRICE OF THIS PRODUCT IN COUNTRY A?
Macro & Micro economics
International Economics: Problem Solving
QUESTION 1
Answer questions below based upon the following information about country A’s market
for its importable.
Country A’s supply curve: P = 0.5Q
Country A’s demand curve: P= 40 – 0.25Q
whereP denotes price and Q denotes quantity
Suppose that country C would be willing to export the product to A for $15 per unit,
while country B, the low-cost world producer, is willing to export at a price of $10.
Similarly, let the lines (SB + tariff) and (SC + tariff) denote the domestic price of the
product imported from countries B and C if the above tariff is imposed, respectively.
(a) Illustrate this market in country A on a demand and supply diagram. (Please show
all the intercepts). Let the lines SB and SC denote the export supply curves to A’s
market from countries B and C, respectively.
(b) Under free trade, from whom country A import this product? How many units
will it import and what will be the domestic price of this product in country A?
(c) If A imposes a per unit tariff of $10 on imports from country B, from whom will
it import this product? How many units will it import and what will be the
domestic price of this product in country A? Show your calculations and graph.
Let the lines (SB + tariff) denote the domestic price of the product imported from
country B if the above tariff is imposed.
(d) If A imposes a per unit tariff of $10 on imports from country C, from whom will
it import this product? How many units will it import and what will be the
domestic price of this product in country A? Show your calculations and graph.
Let the lines (SC + tariff) denote the domestic price of the product imported from
country C if the above tariff is imposed.
(e) If A imposes a per unit tariff of $10 on imports from both B and C, from whom
will it import this product? How many units will it import and what will be the
domestic price of this product in country A? Show your calculations and graph.
Similarly, let the lines (SB + tariff) and (SC + tariff) denote the domestic price of
the product imported from countries B and C if the above tariff is imposed,
respectively.
Question 2: Quotas
The United States has used quotas to protect its domestic sugar industry. What has been
the likely impact of these quotas on the world price of sugar (relative to the price that
would exist under free trade)? Explain.
Question 3: NAFTA
In your opinion, why was the formation of NAFTA so controversial in the US, while the
formation of Canada-US FTA was little noticed by most Americans?
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.